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Henkel Backs Annual Growth Forecast After 'Good Start' In 2012


German household consumer products maker Henkel AG & Co. KGaA (HENKY.PK, HENOY.PK), which reported the best results in its history in fiscal 2011, on Monday reconfirmed its fiscal 2012 growth forecast after noting that it had a 'good start' to the year.

For fiscal 2012, Henkel continues to expect organic sales growth between 3 and 5 percent, a growth in adjusted EBIT margin to 14 percent from last year's 13 percent and to improve adjusted earnings per preferred share by at least 10 percent.

In its fiscal 2011, adjusted earnings per preferred share was 3.14 euros and sales were 15.61 billion euros, both higher than last year, despite operating in a challenging economic environment. Organic sales, which excluded the impact of foreign exchange and acquisitions/divestments, increased 5.9 percent.

While reconfirming its annual forecast in March, the company had said that it is confident of achieving the targets for fiscal 2012 that it set in 2008.

Henkel then noted that the forecast is based on expectation that its consumer goods businesses would continue the positive growth trend, with sales likely to expand in the low single-digit percentage range. For the Adhesive Technologies business sector, Henkel expected sales to grow in the mid-single-digit percentage range. Along with the anticipated sales growth, the earnings performance should reflect the positive impact of various measures on its cost structure, the company had said.

Henkel today said it will outline further details about the forecast when it publish first quarter results on May 9.

While announcing last year's results, Henkel CEO Kasper Rorsted had noted that a major factor driving Henkel's strong performance was the further expansion of the company's position in the emerging markets, which registered double-digit growth.

At today's Annual General Meeting, Rorsted said, "Henkel recorded the best year in its company history. We fully met all our financial targets and even overdelivered on a number of them. The strong focus on our vision and values and on our strategic priorities, as well as the global footprint of our company significantly contributed to this achievement."

Henkel added that it is proposing to the AGM the already announced increase in dividend per preferred share to 0.80 euros from 0.72 euros and the dividend per ordinary share to 0.78 euros from 0.70 euros. The company's dividend since 2008 has increased by more than 50 percent, it said.

Referring to the current economic environment, Rorsted said the company has to accept higher volatility in its markets as the 'new normal' and that it has to permanently adapt processes and structures to be able to respond more quickly and more flexibly than its peers.

He also emphasized the further strengthening of Henkel's top brands, innovations, the expansion of its position in the emerging markets as well as the strategic importance of sustainability for the company.

Henkel, which recently presented its new Sustainability Strategy 2030, added that it has set itself the ambitious goal of tripling its efficiency by the year 2030.

"To achieve this ambitious long-term goal, we either have to triple the value we create while leaving the footprint at the same level. Or we reduce our footprint to one third of today's level by delivering the same value." the company said in its statement.

On Frankfurt's Xetra, Henkel shares are currently trading at 55.15 euros, up 0.40 euros or 0.73 percent.

by RTTNews Staff Writer

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